COPYRIGHT 2001 PEARSON EDUCATION CANADA INC. CHAPTER 14 1 CHAPTER 14 ORGANIZATIONAL STRUCTURE
COPYRIGHT 2001 PEARSON EDUCATION CANADA INC. CHAPTER 14 2 LEARNING OBJECTIVES Define organizational structure and explain how it corresponds to division of labour. Discuss the relative merits of various forms of departmentation. Review the more basic and more elaborate means of achieving organizational coordination.
COPYRIGHT 2001 PEARSON EDUCATION CANADA INC. CHAPTER 14 3 Discuss the nature and consequences of traditional structural characteristics. Explain the distinction between organic and mechanistic structures. Discuss the emergence of network, virtual, modular and boundaryless organizations. Review important considerations concerning downsizing.
COPYRIGHT 2001 PEARSON EDUCATION CANADA INC. CHAPTER 14 4 WHAT IS ORGANIZATIONAL STRUCTURE? The manner in which an organization divides its labour into specific tasks and achieves coordination among these tasks.
COPYRIGHT 2001 PEARSON EDUCATION CANADA INC. CHAPTER 14 5 THE DIVISION AND COORDINATION OF LABOUR Labour must be divided because individuals have physical and intellectual limitations.
COPYRIGHT 2001 PEARSON EDUCATION CANADA INC. CHAPTER 14 6 DIVISION OF LABOUR IN A MANUFACTURING FIRM
COPYRIGHT 2001 PEARSON EDUCATION CANADA INC. CHAPTER 14 7 VERTICAL DIVISION OF LABOUR is concerned with apportioning authority and for planning and decision making
COPYRIGHT 2001 PEARSON EDUCATION CANADA INC. CHAPTER 14 8 AUTHORITY AND CONTROL is related to decision making and authority and the number of levels in the hierarchical structure. COMMUNICATION is related to coordination between levels.
COPYRIGHT 2001 PEARSON EDUCATION CANADA INC. CHAPTER 14 9 HORIZONTAL DIVISION OF LABOUR groups the basic tasks to be performed into jobs and then into departments so organizational goals can be achieved. Job Design Differentiation
COPYRIGHT 2001 PEARSON EDUCATION CANADA INC. CHAPTER DEPARTMENTATION refers to the assignment of jobs. Functional Departmentation Product Departmentation Matrix Departmentation
COPYRIGHT 2001 PEARSON EDUCATION CANADA INC. CHAPTER FUNCTIONAL DEPARTMENTATION
COPYRIGHT 2001 PEARSON EDUCATION CANADA INC. CHAPTER PRODUCT DEPARTMENTATION
COPYRIGHT 2001 PEARSON EDUCATION CANADA INC. CHAPTER MATRIX DEPARTMENTATION
COPYRIGHT 2001 PEARSON EDUCATION CANADA INC. CHAPTER Other Forms of Departmentation Geographic Departmentation Customer Departmentation Hybrid Departmentation
COPYRIGHT 2001 PEARSON EDUCATION CANADA INC. CHAPTER GEOGRAPHIC DEPARTMENTATION
COPYRIGHT 2001 PEARSON EDUCATION CANADA INC. CHAPTER CUSTOMER DEPARTMENTATION
COPYRIGHT 2001 PEARSON EDUCATION CANADA INC. CHAPTER BASIC METHODS OF COORDINATING DIVIDED LABOUR COORDINATION is a process of facilitating timing, communication and feedback among work tasks.
COPYRIGHT 2001 PEARSON EDUCATION CANADA INC. CHAPTER DIRECT SUPERVISION – Working through a chain of command, designated supervisors or managers coordinate the work of subordinates.
COPYRIGHT 2001 PEARSON EDUCATION CANADA INC. CHAPTER STANDARDIZATION OF WORK PROCESSES – Jobs that are routine provide for standardization. Rules and regulations also provide a means for standardization.
COPYRIGHT 2001 PEARSON EDUCATION CANADA INC. CHAPTER STANDARDIZATION OF OUTPUTS – Ensuring that the work meets certain physical or economic standards.
COPYRIGHT 2001 PEARSON EDUCATION CANADA INC. CHAPTER STANDARDIZATION OF SKILLS – Based on interlocking training as well as different functional specialties.
COPYRIGHT 2001 PEARSON EDUCATION CANADA INC. CHAPTER MUTUAL ADJUSTMENT – Informal communication to coordinate tasks.
COPYRIGHT 2001 PEARSON EDUCATION CANADA INC. CHAPTER METHODS OF COORDINATION AS A CONTINUUM OF WORKER DISCRETION
COPYRIGHT 2001 PEARSON EDUCATION CANADA INC. CHAPTER OTHER METHODS OF COORDINATION INTEGRATION – The process of attaining coordination across differentiated departments. LIAISON ROLE – A person is assigned to help achieve coordination between his or her department and another department.
COPYRIGHT 2001 PEARSON EDUCATION CANADA INC. CHAPTER TASK FORCES AND TEAMS – Groups set up to solve coordination problems across several departments. INTEGRATORS – Organizational members permanently assigned to facilitate coordination between departments.
COPYRIGHT 2001 PEARSON EDUCATION CANADA INC. CHAPTER TRADITIONAL STRUCTURAL CHARACTERISTICS SPAN OF CONTROL The number of subordinates supervised by a superior.
COPYRIGHT 2001 PEARSON EDUCATION CANADA INC. CHAPTER FLAT STRUCTURE An organization with relatively few levels in its hierarchy of authority.
COPYRIGHT 2001 PEARSON EDUCATION CANADA INC. CHAPTER Flat Organization: 31 members; 3 levels; average span of control is 5
COPYRIGHT 2001 PEARSON EDUCATION CANADA INC. CHAPTER TALL STRUCTURE An organization with relatively many levels in its hierarchy of authority.
COPYRIGHT 2001 PEARSON EDUCATION CANADA INC. CHAPTER Tall Organization: 31 members; 5 levels; average span of control is 2
COPYRIGHT 2001 PEARSON EDUCATION CANADA INC. CHAPTER FORMALIZATION The extent to which work roles are highly defined by an organization.
COPYRIGHT 2001 PEARSON EDUCATION CANADA INC. CHAPTER CENTRALIZATION The extent to which decision- making power is localized in a particular part of an organization.
COPYRIGHT 2001 PEARSON EDUCATION CANADA INC. CHAPTER COMPLEXITY The extent to which an organization divides labour vertically, horizontally and geographically.
COPYRIGHT 2001 PEARSON EDUCATION CANADA INC. CHAPTER MECHANISTIC VERSUS ORGANIC STRUCTURES ORGANIZATIONAL CHARACTERISTICS ORGANICMECHANISTIC Span of control WideNarrow Number of levels of authority FewMany Degree of centralization in decision making LongShort Quality of formal rules HighLow Range of skill levels NarrowWide Knowledge-based authority HighLow
COPYRIGHT 2001 PEARSON EDUCATION CANADA INC. CHAPTER MECHANISTIC STRUCTURES Organizational structures characterized by: Tallness Specialization Centralization Formalization
COPYRIGHT 2001 PEARSON EDUCATION CANADA INC. CHAPTER ORGANIC STRUCTURES Organizational structures characterized by: Flatness Low specialization Low formalization Decentralization
COPYRIGHT 2001 PEARSON EDUCATION CANADA INC. CHAPTER NETWORK ORGANIZATION Liaisons between specialist organizations that rely strongly on market mechanisms for coordination. Emphasis is on who can do what most effectively and economically.
COPYRIGHT 2001 PEARSON EDUCATION CANADA INC. CHAPTER VIRTUAL ORGANIZATION A network of continually evolving independent organizations that share skills, costs and access to one another’s markets. Each partner contributes only in its area of core competencies.
COPYRIGHT 2001 PEARSON EDUCATION CANADA INC. CHAPTER THE MODULAR ORGANIZATION An organization that performs a few core functions and outsources non-core activities to specialists and suppliers. It is like a hub that is surrounded by networks of suppliers that can be added or removed as needed. It maintains complete strategic control.
COPYRIGHT 2001 PEARSON EDUCATION CANADA INC. CHAPTER THE BOUNDARYLESS ORGANIZATION An organization that removes vertical, horizontal and external barriers so that employees, managers, customers and suppliers can work together, share ideas and identify the best ideas for the organization. It is made up of self-managing and cross- functional teams that are organized around core business processes.
COPYRIGHT 2001 PEARSON EDUCATION CANADA INC. CHAPTER There is the advantage of its ability to adapt to environmental changes. It also has the disadvantage of having to overcome political and authority boundaries, and it can be time consuming to manage the democratic process to coordinate the efforts of many stakeholders.
COPYRIGHT 2001 PEARSON EDUCATION CANADA INC. CHAPTER THE IMPACT OF SIZE ON AN ORGANIZATION Complexity Increases a.Horizontal b.Vertical c.Geographical
COPYRIGHT 2001 PEARSON EDUCATION CANADA INC. CHAPTER THE IMPACT OF SIZE ON AN ORGANIZATION Complexity Increases a. HorizontalIncreased Need b. Verticalfor Coordination c. Geographicand Control As SizeCentralization IncreasesDecreasesProvision of Coordination Formalizationand Control Increases
COPYRIGHT 2001 PEARSON EDUCATION CANADA INC. CHAPTER DOWNSIZING AND STRUCTURE The intentional reduction in the workforce size with the goal of improving organizational efficiency or effectiveness.
COPYRIGHT 2001 PEARSON EDUCATION CANADA INC. CHAPTER It can be accomplished by: Layoffs Hiring freezes Natural attrition
COPYRIGHT 2001 PEARSON EDUCATION CANADA INC. CHAPTER Downsizing is accompanied by: vertically reducing management levels or substituting self-managed teams horizontally combining functions or contracting them out